Spyglass - Majorana's Mask

Spooky action at a distance...

It was an interesting superposition for tech news. Yesterday, at the exact same time, the embargo lifted on two stories from two $3T companies. Apple's news? A new iPhone. Microsoft's news? A new form of matter.

Historically, the biggest mistake you can make in PR is failing to navigate around an Apple announcement. Such things tend to suck out all of the oxygen in the press room. But this seemed like a rather brilliant bit of counter-programming by Microsoft. Not only because the news could not be any more different, but because of how trivial it made Apple's announcement seem. Many immediately jumped on this humorous dichotomy.

Martin Peers highlighted the sentiment well in his Information briefing:

Yes, while Microsoft is trying to change the very nature of computing, Apple is reinventing cellular modems so that one day it won’t have to pay the industry leader, Qualcomm, to use its state-of-the-art modems. That’s what counts for ambition in Cupertino, Calif., nowadays.

Is that fair? I mean yes and no.

First and foremost, while Microsoft's stated breakthroughs in quantum computing sound incredible – topological qubits! Majorana fermions! – every story is also quick to couch the news with some skepticism or, at least, caution. After all, Microsoft has made promises in this realm before only to have to backtrack... At best, this is an "end of decade" thing, in terms of being put to practical use, even by Microsoft's own admission.¹ If it's not exactly science fiction, it's not entirely science fact either. Not yet anyway.

On the other hand, if Microsoft is correct in their approach to quantum computing, which is more of a hybrid approach leveraging semi and superconductors versus the more "pure" efforts of others, the path may be paved for the next multi-billion (trillion?) dollar business. The next big thing after the current big thing, AI, where Microsoft also made a prescient early bet in the form of the OpenAI partnership. Even if there's just a small chance that they're right here, it's worth the bet every time. And it's why Google and others are also placing bets in the space, obviously.

Apple, meanwhile, is living in the present. They famously don't do science projects – at least not publicly! And this insulates them from vaporware.² The iPhone is the best business in the world – perhaps the best ever. It's still really all that matters to Apple's bottom-line and so releasing a new iPhone, no matter how muted, is always a big deal. And it's shipping not in a decade, but next week.

While announcing the two projects at the same time certainly pales the iPhone in comparison, let's not get too high and mighty about being above announcing actual products, no matter how iterative.

At the same time, Apple does seem to be in a bit of a rut. As much of a rut as you can be in as the most valuable company on the planet. Their most-recent earnings were record-breaking, but still somehow underwhelming. Part of that was the aforementioned iPhone business slipping a bit (and a big part of that was China), but it's also because what has clearly proven to be the Next Big Thing™ for Apple is not another product like the Vision Pro, but instead is their Services business.

Essentially, they're milking the cash cow. That's what you-know-who was doing for years under Steve Ballmer!

I mean, is that fair? Not entirely. Apple still creates and ships great products. And the Apple Watch line in particular is doing some great things in health, which are truly profound. But directionally, Apple just feels to many as less innovative and more iterative. And the current AI boom has just exacerbated this feeling. Apple may actually and ultimately be correct in taking a slow and steady approach to the technology, but it certainly doesn't feel that way right now. It feels like they're behind. Certainly with Siri, comically so.

Back to Peers:

The diverging ambitions of these two icons of tech, both born in the mid-1970s, is striking. Microsoft isn’t the first company to claim a major advance with quantum computing—Google had a similar announcement in December. We have no idea which of these advances, if any, will end up doing anything practical. Still, it’s refreshing to see a tech CEO like Satya Nadella nerding out about the potential of quantum computing, after years of hearing Apple CEO Tim Cook talking breathlessly about infinitesimal improvements in each new iPhone.

No question, the quantum computing talk is refreshing and inspiring. The iPhone 16e? It's the "most affordable" iPhone – which is decidedly less affordable than the model it is replacing. Not inspiring stuff.

While there has been no chatter about Apple investigating quantum computing,³ perhaps that's the prudent thing. Still, it feels like the company needs something to inspire the masses again. It won't be a thin iPhone, but it could be a robot that evokes joy and a more emotional response out of users. That's my hope, at least.

One more parallel universe for these two companies: by one account, this quantum breakthrough has been 17 years in the making for Microsoft. Guess which product Apple was busy shipping 17 years ago... So in a way, the iPhone 16e has also been 17 years in the making!

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¹ Though this certainly beats Jensen Huang's 20 year time horizon for the technology (of course, he has his own biases there)...

² The most famous example of Apple's announcing something that never shipped may be AirPower. They were clearly close, but couldn't get the product perfected to their standards. And the stakes, obviously, were far lower.

³ They are, of course, very secretive. And they do, of course, have one of the best chip teams in the world. Still, quanum is clearly a very different beast...